U.S. Airlines Must Now Provide Refunds for Canceled Flights

Airline passengers will no longer have to worry about losing money on canceled or delayed flights .

On Monday, the Department of Transportation announced a rule change that went into effect, stating that airlines will automatically provide cash refunds to passengers whose flights have been canceled, even if the customer doesn't request one.

The policy also states airlines can not substitute cash refunds with vouchers, travel credits, or other forms of compensation unless the passenger wants the alternative option.

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Transportation Secretary Pete Buttigieg reflected on the decision on his X account months after he made the initial proposition.

"Today, our automatic refund rule goes into full effect," Buttigieg tweeted. "Passengers deserve to get their money back when an airline owes them—without headaches or haggling."

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The new rule orders that an airline will process refunds if a flight is "canceled or significantly changed, and they do not accept the significantly changed flight, rebooking on an alternative flight, or alternative compensation." The airline has seven days to process a refund to a passenger who used a credit card to buy their tickets. For those who used any other form of payment, the airline company will have 20 days to process the refund.

Regarding delayed flights, passengers are entitled to refunds if their flight is delayed for more than three hours for domestic travel or six hours for international destinations. The new rule also implements refunds regarding baggage issues.

The airline must issue a refund if a passenger's checked bags don't arrive at a specific destination within 12 hours on domestic flights or 15-30 hours on international trips. Also, passengers will get a refund from airlines if inflight Wi-Fi or entertainment is unavailable once purchased during a flight.

Despite the rule receiving major pushback from the airline industry, the North American airline lobby group, Airlines for America, wrote in a statement it fully supports "the automatic refund rule and are happy to accommodate customers with a refund when they choose not to be rebooked."

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